Jobless Rate Dips, but So Do Jobs

The nation's unemployment rate dipped to 9.5 percent in June, but the improvement belies pessimism regarding what some fear could be a faltering economic recovery.

Figures released Friday by the U.S. Department of Labor showed employment fell by 125,000 last month, a drop that typically would send the jobless rate higher.

But the unemployment rate is based on the size of the labor force, which includes only those working or actively seeking employment. The labor force shrunk by 652,000 last month. Since those not looking for work aren't included in the ranks of the unemployed, the jobless rate fell 0.2 percentage points from the 9.7 percent rate reported in May.

When the recession began in December 2007, the national jobless rate stood at 4.9 percent. Since then, payrolls have fallen by 7.9 million.

The report comes as a number of economic statistics, including dips in retail sales and consumer confidence, cast doubt on the sustainability of the economic recovery. The government reported Thursday that first-time jobless claims rose 3 percent last week to 472,000.

The number of discouraged workers -- those who have given up looking for work because they believe no jobs are available -- stood at 1.2 million last month, up 52 percent from year-ago levels. The Economic Policy Institute said that if the unemployment count included those discouraged workers and those who have accepted part-time jobs because they can't find full-time work, the rate would be 16.5 percent.

The ranks of the long-term unemployed -- those out of work for 27 or more weeks -- held steady at 6.8 million. They account for 45 percent of the unemployed.

The Labor Department figures reflect an 83,000 increase in the number of private sector jobs and a 225,000 decrease in the number of temporary U.S. Census workers. Leisure and hospitality, the temporary services industry, transportation, warehousing and manufacturing were among the sectors adding jobs during the month, the agency said. Construction jobs fell by 22,000.